Friday, April 4, 2008

US loses jobs at fastest rate in 5 years

Go to Financial Times original
US employers cut more jobs in March than at any other time in the past five years, reinforcing the view that the US is in recession and raising fears about consumer spending.

The weaker-than-expected figures and a jump in the unemployment rate will maintain pressure on the Federal Reserve to cut interest rates by 50 basis points at its next policy meeting, even though policy-makers remain concerned about inflation.

Non-farm payrolls dropped 80,000 last month, the third consecutive month that the labour market has contracted and the steepest drop since March 2003. The market was expecting the loss of about 50,000 jobs.

The Bureau of Labor Statistics also revised upwards its estimate of job losses in January and February. The figures show the US has lost between 76,000 and 80,000 jobs every month since the start of this year and 232,000 jobs during the quarter.

Meanwhile, the unemployment rate rose from 4.8 per cent to 5.1 per cent in March, suggesting growing slack in the economy.

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